21 May 2013

The US Environmental Protection Agency (EPA) has issued a proposed rulemaking for modifications to the Renewable Fuel Standard (RFS2) program. The proposal also includes various changes to the E15 misfueling mitigation regulations (E15 MMR), ultra low sulfur diesel survey requirements as well as other technical amendments.

The proposed rules include various changes related to biogas, including changes related to the revised compressed natural gas (CNG)/liquefied natural gas (LNG) pathway and amendments to various associated registration, recordkeeping, and reporting provisions. It also adds new pathways for renewable diesel, renewable naphtha, and renewable electricity (used in electric vehicles) produced from landfill biogas.

EPA is also proposing to allow butanol that meets the 50% GHG emission reduction threshold to qualify as an advanced biofuel. The rulemaking also proposes a clarification regarding the definition of crop residue to include corn kernel fiber and proposes an approach to approving the volume of cellulosic biofuels produced from various cellulosic feedstocks (the issue here being the percentage of cellulose in the feedstocks).

Renewable electricity, renewable diesel and naphtha produced from landfill biogas. In the final RFS2 rule, EPA established biogas as an advanced biofuel type when derived from landfills, sewage waste treatment plants, and manure digesters. EPA also established cellulosic diesel and cellulosic naphtha as eligible cellulosic biofuels; eligible feedstocks for these biofuels included cellulosic components of separated municipal solid waste but did not include biogas from landfills.

EPA is now proposing to include renewable electricity (when used in transportation) produced from landfill biogas feedstock as well as diesel and naphta produced from landfill biogas via the Fischer-Tropsch process as approved advanced and/or biomass-based fuels.

If the Fischer-Tropsch facilities produce at least 20% of their electricity demand at the facility from certain allowed sources, EPA is proposing that the renewable diesel and naphtha produced would further qualify as cellulosic biofuels.

Renewable CNG/LNG produced from biogas from waste treatment plants and waste digesters is still classified as an advanced biofuel. However, renewable CNG/LNG produced from biogas from landfills would qualify as a cellulosic pathway.

Advanced butanol pathway. EPA is proposing a new pathway that allows butanol made from corn starch using a combination of advanced technologies to meet the 50% GHG emissions reduction needed to qualify as an advanced renewable fuel.

This pathway applies to dry mill fermentation facilities that use natural gas and biogas from an on-site thin stillage anaerobic digester for process energy with combined heat and power (CHP) producing excess electricity of at least 40% of the purchased natural gas energy of the facility (the proposed “advanced butanol pathway”).

Cellulosic volumes from cellulosic feedstock. For purposes of the RFS program, cellulosic biofuel is defined as “renewable fuel derived from any cellulose, hemicellulose, or lignin that is derived from renewable biomass and that has lifecycle greenhouse gas emissions, as determined by the Administrator, that are at least 60 percent less than the baseline lifecycle greenhouse gas emissions.”

However, EPA points out, no plant matter can ever consist entirely of cellulose, hemicellulose and lignin; even feedstocks such as switchgrass, corn stover, and woody materials contain measurable proportions of other types of organic molecules.

Most “cellulosic” feedstocks contain approximately 80-95% cellulose, hemicellulose, or lignin. Corn kernels contain roughly 75% starch and less than 10% fiber (which includes the cellulosic components, as well as other materials), and soybeans are roughly 60% oil and protein and only about 15% fiber.

there can be significant variation in the amount of cellulosic content in any feedstock, which varies within a growing season, across samples, and across sites. Attempting to account for this variability would impose a significant administrative burden on producers and EPA;

the amount of the final fuel that is produced from the cellulosic portion of the feedstock is likely to be very high, particularly for fuels produced using a biochemical reaction; and

EPA has already made previous determinations in which a single RIN value was assigned to the fuel produced since it came primarily from one source even though it was also produced from incidental amounts of other sources.

The Biotechnology Industry Organization (BIO) welcomed the opportunity for public comment on the proposed RFS2 amendments and clarifications.

We appreciate EPA moving forward as rapidly as possible with these program amendments. Companies continue to make investments, put steel in the ground, create jobs and develop technologies that reduce dependence on foreign oil and contribute to a cleaner environment. They are preparing to make additional investments with assurance that US policy is committed to energy security and production of biofuels.

Finalization of new pathways will clear the way for companies to bring innovative technologies to the marketplace. Delays can determine whether these companies succeed or fail and whether investors remain confident. We look forward to working with EPA to rapidly finalize these new rules.